I was wondering when you'd link to the njpp piece.
Look at the graphic showing the primary exodus states for NJ. Missing is where NJ stands relative to these states. According to the
Tax Foundation (source cited by graphic) NJ had the third highest tax burden in the country; so except for NY, all of the exoduses shown were to lower tax states.
It's actually funny to see the piece lead off by arguing that Mass. has a comparable tax burden to NJ. Funny because the Tax Foundation source talks about a
1% difference in tax burdens not being significant, while the difference between NJ and Mass reported is double that (
12.2% vs.
10.3%). To put it differently, NJ's tax burden is
19% higher than Massachusetts'. (I'm just repeating data from or cited by pages you gave.)
The piece says that a "substantial majority" of the emmigration is offset by immigration as though that were to diminish the exodus. What it really means is that a significant minority (about 20%, per CBPP article cited by the piece) of the emmigration is not offset. In fact, between 20
10 and 20
15,
New Jersey had the "third largest net domestic out-migration, behind New York and Illinois and just ahead of California." (Those are four of the six top states in tax burdens, according to the Tax Foundation page. Mass. is #
12)
Some parts of the piece sound like a sales pitch: "These valuable assets and others are what make New Jersey an attractive place to live, work and raise a family for almost 9 million people." Though taken at face value, all this does is give a reason why net emmigration is not even higher. It doesn't lend support to the argument that high taxes have no effect on how "sticky" New Jersey is to residents.
The second piece starts out acknowledging that "A new study finds that the wealthiest Americans are less mobile than lower income workers, but those who do relocate are looking for a tax cut." So despite all those valuable assets, the motivating factor for moving, if people can maintain their income levels elsewhere, is high taxes.
Getting back to the njpp piece, it notes that "More importantly, the amount of new revenue gained from the [income] tax change dwarfed the tax payments that would have been made by those few who left."
The aforementioned CBPP piece says something similar: "policymakers in
most relatively high-tax states still have considerable room to increase income taxes on the affluent before they should worry about the potential effects on migration." Emphasis added.
Two takeaways:
1) Normally, when a state raises or preserves high income taxes it may net greater revenue albeit on a declining tax base. However, when people pay more in taxes (due to eliminating SaLT deductions), the state only loses revenue as its tax base erodes. That was the point of the Barrons article, and nothing here has refuted it.
2)
New Jersey is different from other states - CBPP acknowledges that there are a few high tax states where increased taxes would have a worrisome effect on migration. My guess is those few states don't reach past the top ten for tax burdens. That would certainly explain your local observations.
Talk to your friends in New Jersey. Let us know their impressions.
For kicks, here's what may be the most detailed, quantified analysis of tax migration effects, national and NJ-specific, that I've found. It was prepared by staff of the NJ Treasury Dept. in 20
11.
http://www.state.nj.us/treasury/gsef/Tax Migration Study_with tables.pdf Like the CBPP paper, it states that "Clearly, our results do not suggest that tax-induced migration would come anywhere close to eclipsing the immediate revenue gain from an income tax increase". But also that "average marginal tax rates had a small but significant effect on migration decisions in the U.S. and in New Jersey. We estimate that higher New Jersey income taxes [2004-2008] was associated with a reduction of more than 20,000 taxpayers and a loss of annual income of at least $2
1/2 billion."
